Selling or buying New or Used Construction Products? Some Things to Understand About Fleet Mix

The construction industry has taken a slight hit over the glory years of the housing bubble, but these businesses feeling the downturn may also be exactly the same companies that built infrastructure during the last 200 years. They’ll prevail over any short term drop in overall construction need; having said that there is always attention that may be given toward the return on investment that your construction assets bring to bear. In this type of case we will be discussing construction equipment and tools.
My history is in the rental business, for the reason that industry we were return on investment orientated by understanding each resources contribution to the bottom line by having a real-time understanding over time utilization and dollar utilization. After beginning my own construction business in the past, it became apparent that although I did not have exactly the same measurement tools available with owned construction equipment, the focus on return from equipment investment nonetheless needed to be there. Construction companies are at different levels of understanding the return on invested fleet dollars. I’ve seen large construction companies that do not track costs per apparatus piece. I’ve seen small companies do an exceptionally good job of focusing on how their assets will work for them. In today’s market all companies should operate toward a tightening of the belt by comprehending how to obtain a better return on equipment investment decision. First and foremost, construction companies need the capability to create a correct measurement of outflow of cost in relation to their construction equipment. Fleet managers, operations managers and accountants have to have a form of tracking that contributes specific cost to individual equipment items. Shape a way to collect, store and utilize the data that tells you what is taking place with your construction fleet. It is important that you understand asset utilization and profits on return by examining both your utilization and ROI amounts, you can identify key areas within your operation that need improvement, and take the appropriate steps to adjust just how that business is conducted.
As soon as you start tracking and measuring you will begin to develop the needed data to make informed decision on your own construction fleet mix. When it comes to decision rendering it is all driven by possibility cost which is the price of any activity measured in terms of the best alternative forgone. It is the sacrifice related to the second best choice available to someone who has picked among several mutually special choices. Whenever we analyze opportunity cost as an operations manager we have to understand about other opportunities available. As marketplaces change so do opportunities. Regarding construction equipment you need to understand current market value of the equipment and measure that against various other available fleet options.
Power Tools and Construction Equipment
After careful analysis you might find that your equipment is not providing the needed return where the value of the machine could possibly be put into higher return areas for the business. If this is the case you should look at your true price of keeping the machine by a careful analysis of other business opportunities. In lots of of the markets equipment local rental rates have fallen to an even that does not warrant for contractors to possess an abundance of certain equipment types.
If you find you need to change fleet mix or increase the return generated on a particular piece of equipment there are many marketing opportunities out there.
1) Fleet share – Choose a venue that contractors can list tools for sale and also let other construction professionals understand that they would be ready to lease or rent the item during the interim. This will allow contractors to create additional local earnings while they market the gear for sale.
2) No cost to Market venues – Find an attractive venue that allows you to list your fleet with little or no listing cost, no settlement charges. Generate interest on the gear over time and don’t be subject to inflated prices to take the piece to market.
3) Search for industry deals on New Gear from the Manufactures. Many manufactures are offering deferments in cash outflow for all those with qualifying credit.
4) Do not settle on new or used equipment pay for until you have really viewed the offering of the entire market. Make sure that you are informed on the overall opportunity on the market. This occurs in both utilized and new equipment markets and will be remedied by spending enough time to not only know very well what the machines offer but understand all of the pricing opportunities for the gear type you are looking to acquire. Bottom line is definitely informing yourself on the potential customers of the market.

Author: Jackie Ross